Virtual worlds are innovative teaching and learning methods that can provide immersive and engaging learning experiences (Lu, 2010). Though they have potential benefits, students sometimes experience a steep learning curve and discomfort with the technology (Warburton, 2009). This study explored how students in two American Studies classes using Second Life rated their own levels of virtual world self-efficacy at early and late stages of using it, the factors they felt influenced their self-efficacy, their attitudes and perceptions about its learning value, and the way that students with different degrees of change in self-efficacy viewed its learning value. The study was supported with literature about self-efficacy, and some of the ways it has influenced online teaching and learning. The research questions were explored quantitatively and qualitatively. Quantitative data came from a survey developed for measuring self-efficacy at early and late stages of use. Qualitative data came mainly from interviews with a smaller group of students about the development of their virtual world skills and their perceptions of its learning value. While self-efficacy generally increased in the survey population, interviewees experienced both internal and external barriers and enabling factors contributing to self-efficacy development. Resources and support, as well as increased immersiveness, contributed to positive self-efficacy. Some data supported the idea that increased self-efficacy helped promote positive learning perceptions. However, the more social learning activities were the ones that promoted strongest perceptions of learning value for students.